1) When I recently received word that NTUC's bonus restructuring scheme would cut my annual assured bonus, I did a little of poking around.
2) I read about a few shocking complaints from alleged PHs and ex-employees of NTUC income. Here are some I extracted (from Mr Lim in Online Citizen) and quote(See Red) and I tried to verify the claims (See Green):
a) "NTUC Income paid for all the new CEO insurance plans premiums amounting to more than $50k each year."
[I was unable to verify this. I asked around but no one knows. It is officially under-wraps.]
[NTUC financial statements 2008 Page 13: Although the Coporate Governance Guidelines in Singapore recommends disclosure of renumeration of at least the top 5 key executives, "The Board...has decided against such disclosure"]
[Personal Comment: Why hide? In many of NTUC income's statements, they say they want to build trust. Trust comes with transparency, doesn't it? Especially for a new CEO, the matter of trust and disclosure is even more critical. If what Mr Lim says is true, the CEO's policy(s) would likely be paid-up in fully before his tenure as CEO ends. I mean, I don't mind benefits to the CEO as long as he does good work, but shouldn't the firm pay his premiums slowly? What is the rush? He still gets protection coverage anyway.]
b) "marketing agencies that NTUC Income engage cost more than $2m per annum"
[NTUC financial statements 2008 Page 88: Advertising and promotion expenses in 2007 and 2008 were about 6.7 million each year]
[Personal Comment: I bought 4 policies with NTUC income believing their operating and advert costs are very low. Come to think of it, I have seen Great Eastern Ads and Prudential ads, but no NTUC ads. Pls correct me if I am wrong. I mean, I would love to buy from NTUC income even if they have no ads, if their expenses are low. Less expenses means PHs are better off. Word of mouth is the best ad and now I cannot recommend NTUC as my belief in it has been dented.]
c) "the Ho Chi Min tour for the agents cost more than $1m of policyholders money"
[I cannot find the expenses of the trip itemized alone in the financial statements. However such trip did occur from around April 18th 2008(source) for top financial consultants (aka agents), but I cannot be clear on the expense. You can see a video of the trip here:]
2) I read about a few shocking complaints from alleged PHs and ex-employees of NTUC income. Here are some I extracted (from Mr Lim in Online Citizen) and quote(See Red) and I tried to verify the claims (See Green):
a) "NTUC Income paid for all the new CEO insurance plans premiums amounting to more than $50k each year."
[I was unable to verify this. I asked around but no one knows. It is officially under-wraps.]
[NTUC financial statements 2008 Page 13: Although the Coporate Governance Guidelines in Singapore recommends disclosure of renumeration of at least the top 5 key executives, "The Board...has decided against such disclosure"]
[Personal Comment: Why hide? In many of NTUC income's statements, they say they want to build trust. Trust comes with transparency, doesn't it? Especially for a new CEO, the matter of trust and disclosure is even more critical. If what Mr Lim says is true, the CEO's policy(s) would likely be paid-up in fully before his tenure as CEO ends. I mean, I don't mind benefits to the CEO as long as he does good work, but shouldn't the firm pay his premiums slowly? What is the rush? He still gets protection coverage anyway.]
b) "marketing agencies that NTUC Income engage cost more than $2m per annum"
[NTUC financial statements 2008 Page 88: Advertising and promotion expenses in 2007 and 2008 were about 6.7 million each year]
[Personal Comment: I bought 4 policies with NTUC income believing their operating and advert costs are very low. Come to think of it, I have seen Great Eastern Ads and Prudential ads, but no NTUC ads. Pls correct me if I am wrong. I mean, I would love to buy from NTUC income even if they have no ads, if their expenses are low. Less expenses means PHs are better off. Word of mouth is the best ad and now I cannot recommend NTUC as my belief in it has been dented.]
c) "the Ho Chi Min tour for the agents cost more than $1m of policyholders money"
[I cannot find the expenses of the trip itemized alone in the financial statements. However such trip did occur from around April 18th 2008(source) for top financial consultants (aka agents), but I cannot be clear on the expense. You can see a video of the trip here:]
[Personal comments: To be fair, I think 1 millions is an exaggeration. In year 2009, 250+ staff were eligible for the holiday (source). 1 million means $4,000 per person for 4 days. Even if I factor in plane tickets, hotel accomodation, transport, food, travel insurance(*wink), paid leave, Ho Chi Minh Gala Party at a museum, etc it should not reach 1 million, especially not in Vietnam, maybe a little lesser than 1 Million]
[Personal comments: However, NTUC upgraded to Australia this year in 2009 (i)amid the financial crisis, (ii)when NTUC lost 11.1% in it's fund, (iii)when I was sent a letter telling me lesser annual bonuses are necessary in face of the economic upheaveal. I called my agent, turns out she was on the Australian trip too (sighs). I went on the internet to find out more myself since she was indisposed, I saw the CEO with champagne and bikini girls (guess how I feel):
I am not an actuary nor do I have an MBA like the CEO, but this really bothers me:
i) He had family with him on the trip. I was worried about holiday expenses about non-employees, so I asked for confirmation via from their PR exec Ms Jessie. She tried hard to answer my queries but my query about family of employees was skipped. I wonder why?
ii) Personally, I see no reason for (holiday) rewarding agents based on sales. I admit sales are important. More financial resources may strengthen NTUC financial position making it more secure and more financial muscle may mean more bonuses for PHs. Contractual medical benefits, education benefits are useful to instilling loyalty, but an all expense paid holiday? I assume private insurance companies can offer these top agents even BETTER holiday destinations for top-agents to leave NTUC. The only benefit I see is ...well... I would want to be the CEO in the photos enjoying himself.
iii) Couldn't a cheaper, closer and simpler holiday be organised? I mean, the economy is bad, NTUC income insurance fund is bleeding...what's with the champagne...what's there for the CEO to celebrate with champagne? Understandably this is not gold-tap style indulgence but still, I always thought of NTUC income as a frugal company since young. The Australian trip is really elaborate and costly: cruises, resorts, performances, specialised menus with 'NTUC Income' imprinted, etc etc etc. See the videos here:
d) This should cost a LOT of money. According to what I have read (source) 250+ people were brought to Australia!!! I mean the money would benefit PH's dependents who are orphans, widows, etc much much more meaningfully! The money could support so many unfortunate kids, wives, etc who have lost their loved ones. I must implore and beg NTUC Income to be really more frugal. I estimate the money is enough to support at least 10 orphaned kids till universityif NTUC income forgoes their exhorbitant trip!
e) "The lobby of NTUC Income Centre's 6th floor looks more like a hotel lobby than an office."
[No info can be found.]
f) "While meetings that were previously held at Kreta Ayer during Mr Tan Kin Lian’s era, meetings are now held at the posh Ritz Carlton, Suntec City, Esplanade, Swissotel Stamford to name a few" ... "meeting rooms are all renovated to look like lounges"
f) "While meetings that were previously held at Kreta Ayer during Mr Tan Kin Lian’s era, meetings are now held at the posh Ritz Carlton, Suntec City, Esplanade, Swissotel Stamford to name a few" ... "meeting rooms are all renovated to look like lounges"
[To be fair, there was a meeting in Kreta Ayer Town Hall 5th Feb
However, there are indeed meetings in more expensive places:
Grand Hyatt
Raffles City Convention
Orchard Hotel
The Rock
Fu Li Men restaurant etc over the past few months to name a few. I can't verify the other locations due to insufficient info]
The total expenses incurred for 2006-2008 are $128m, $168m and $188m. The revenue premiums for these three years were $1.9b, $2.3b and $2.5b. Year after year, % rise in expenses are greater than premiums. This is a worrying trend indeed. NTUC income, pls be more frugal. Presently, it feels that cuts in PHs' annual bonuses are used to fund classy holidays for NTUC income's management and staff.
